Land tax is the bill nobody warns you about. You buy your first investment property, everything's fine, and then a year later an assessment lands from the state revenue office for a tax you'd half-forgotten existed. The reason it blindsides people is simple: your own home is exempt, so most Australians never pay it — right up until the moment they own land that isn't their home.
It's also genuinely hard to research, because every state runs its own thresholds, rates, surcharges and even assessment dates, and each revenue office only ever tells you about its own. So here's the thing none of them will give you: the honest cross-state comparison, with the verified 2025-26 numbers, in one place.
What land tax actually is
Land tax is an annual state or territory tax on the unimproved value of the land you own above a tax-free threshold. A few points worth getting straight up front, because they're where the confusion lives:
- It's on the land, not the building. The tax is assessed on the site value from the state Valuer-General — the land only. The house sitting on it is irrelevant.
- Your home is exempt. Your principal place of residence is exempt in every state that charges it. Land tax mainly hits investment properties, holiday homes and vacant land.
- It's separate from stamp duty and council rates. Stamp duty is a one-off when you buy. Council rates fund your local services. Land tax is a yearly state tax you pay for as long as you hold taxable land.
- It's assessed at a single moment each year. Whoever owns the land on the assessment date (31 December in NSW and Victoria, 30 June in most others) gets the bill for that year.
Land tax thresholds and rates by state, 2025-26
This is the table the revenue offices can't give you. All figures are for the 2025-26 land tax year and verified against each official source.
| State / Territory | Tax-free threshold | Headline rate | Assessed on | Foreign surcharge |
|---|---|---|---|---|
| NSW | $1,075,000 (general) $6,571,000 (premium) | $100 + 1.6% above general; 2% above premium | 31 December | 5% |
| VIC | $50,000 | scales to $31,650 + 2.65% above $3m | 31 December | 4% absentee |
| QLD | $600,000 (individuals) $350,000 (companies/trusts) | scales to 2.25% (individuals) | 30 June | 3% |
| SA | $833,000 | scales to 2.4% above $3.116m | 30 June | None |
| WA | $300,000 | scales to 2.67% (+0.14% metro MRIT) | 30 June | None |
| TAS | $125,000 | $1,737.50 + 1.5% above $500,000 | 1 July | 2% |
| ACT | None (all non-home rentals) | $1,693 fixed + up to ~1.26% of land value | Quarterly | 0.75% |
| NT | No land tax at all | — | ||
A few standouts. NSW has by far the highest threshold ($1,075,000), so a single mid-value investment block often pays nothing. Victoria has the lowest at $50,000 — it slashed the threshold from $300,000 in 2024 as part of a temporary COVID-debt levy, which dragged in around 360,000 new taxpayers. Tasmania's low threshold and 1.5% top rate bite hard on even modest holdings. The ACT runs a completely different model — no threshold, but every rented or vacant residential property is taxed, billed quarterly. And the Northern Territory charges no land tax whatsoever, the only jurisdiction with none.
The four concepts that trip people up
1. Aggregation — why the second property is the one that hurts
This is the single most misunderstood part of land tax. You're not taxed property by property — you're taxed on the combined value of all the taxable land you own in a state. Two $500,000 blocks in NSW are assessed as one $1,000,000 holding. It's exactly why your first investment property is often what triggers your first land tax bill: it pushes your total land value over the threshold. Each state only aggregates land within its own borders, so spreading investments across states can keep you under multiple thresholds — a strategy plenty of property investors use deliberately.
2. It's the land value, not what you paid
The tax is calculated on the unimproved site value set by the Valuer-General, which is usually well below the market price you paid (because it excludes the house). NSW smooths it using a three-year average of land values, and the ACT uses a five-year average, so a single boom year doesn't spike your bill overnight.
3. Your home is exempt — but only one home
Your principal place of residence is exempt everywhere land tax applies. The catch is you only get one main residence exemption. A holiday house, a property you rent out, or vacant land you're holding all count toward your taxable total. Victoria goes further and adds a separate Vacant Residential Land Tax on genuinely empty homes, escalating from 1% to 3% the longer they sit idle.
4. Foreign owners and trusts pay more
Most states add a surcharge on top of the standard bill for foreign or absentee owners — NSW 5%, Victoria 4%, Queensland 3%, Tasmania 2%, the ACT 0.75%. South Australia, WA and the NT have no land-tax surcharge. Holding property through a trust also usually means a much lower threshold or a surcharge rate, which can turn a $0 bill into a real one — something to weigh before you buy in a trust structure.
What it actually costs: worked examples
Numbers make it real. Here's the annual land tax on a single investment block, assuming it's your only taxable land in that state (real bills depend on aggregation and surcharges, so treat these as estimates).
Land valued at $700,000
| State | Estimated annual land tax |
|---|---|
| NSW | $0 (under the $1,075,000 threshold) |
| SA | $0 (under the $833,000 threshold) |
| NT | $0 (no land tax) |
| WA | ~$1,000 (plus metro MRIT) |
| QLD | ~$1,500 |
| VIC | ~$2,850 |
| TAS | ~$4,738 |
Land valued at $1,200,000
| State | Estimated annual land tax |
|---|---|
| SA | ~$1,835 |
| NSW | ~$2,100 |
| WA | ~$3,550 (plus metro MRIT) |
| VIC | ~$6,450 |
| QLD | ~$7,800 |
The pattern is clear: Victoria and Queensland are the most aggressive at typical investor land values, NSW's high threshold shields anything under $1.075 million entirely, South Australia's high indexed threshold is investor-friendly, Tasmania punishes even modest holdings, and the Northern Territory charges nothing. It's a real factor in where an investment stacks up — alongside negative gearing and the eventual capital gains tax on sale.
When and how you pay it
You don't lodge a return — the revenue office assesses you automatically off Valuer-General data and the land titles register, then sends an annual notice (the ACT bills quarterly by design). You do, however, have to notify them when you become liable — for example, when a property stops being your home and becomes a rental, or when you cross the threshold. Most states offer to split the bill into a few instalments. Miss the registration step and you can face back-assessments and penalties, so if you've turned a former home into an investment, tell the revenue office.
One thing to plan for if you're buying vacant land to build on: it's taxable while it sits empty, so factor a possible land tax bill into your holding costs. Our guide to buying land in Australia covers the other costs that come with it.
A note on 2026-27
Land tax settings change often. The ACT's 2026-27 Budget and WA's 2026-27 housing package both adjust land tax figures from 1 July 2026, and NSW has frozen its thresholds pending a review due by mid-2027 (which means bracket creep will quietly pull more owners in over time). Everything here is current for the 2025-26 year — always confirm the live figure with your state revenue office before you rely on it.
Frequently asked questions
Do you pay land tax on your own home in Australia?
No. Your principal place of residence is exempt from land tax in every state and territory that charges it. Land tax applies to land that isn't your main home — investment properties, holiday houses and vacant land. You only get one main-residence exemption, so a second property you don't live in will count toward your taxable land.
What is the land tax threshold in each state for 2025-26?
The tax-free thresholds for 2025-26 are: NSW $1,075,000 (general), Victoria $50,000, Queensland $600,000 for individuals ($350,000 for companies and trusts), South Australia $833,000, WA $300,000, and Tasmania $125,000. The ACT has no threshold — it taxes every non-owner-occupied residential property. The Northern Territory has no land tax at all.
How is land tax calculated?
Land tax is calculated on the unimproved (site) value of your land, as set by the state Valuer-General — not the value of the house or what you paid. It's assessed on the combined value of all your taxable land in a state above that state's threshold, on a sliding scale of rates. NSW uses a three-year average of land values and the ACT a five-year average to smooth out spikes.
Why is land tax assessed on all my properties together?
This is called aggregation. Each state assesses land tax on the total combined value of all the taxable land you own within that state, not property by property. So two blocks that are each under the threshold can be over it once combined. It's the main reason buying a second property often triggers your first land tax bill. States only aggregate land within their own borders.
Which state has the highest and lowest land tax?
The Northern Territory is lowest — it has no land tax at all. Among states that charge it, NSW has the most generous threshold ($1,075,000), so lower-value holdings often pay nothing, while Victoria has the lowest threshold ($50,000) after its 2024 COVID-debt changes, and Tasmania's low threshold plus a 1.5% top rate makes it costly on modest holdings. At typical investor land values, Victoria and Queensland tend to charge the most.
Do you pay land tax on vacant land?
Yes. Vacant land isn't your home, so it counts toward your taxable land value and is assessed like any other holding above the threshold. Victoria adds an extra Vacant Residential Land Tax on empty homes, escalating from 1% to 3% the longer they stay vacant. If you're holding land to build on later, budget for a possible annual land tax bill as part of your holding costs.
When is land tax assessed and paid?
Land tax is assessed once a year based on who owns the land on the assessment date — 31 December in NSW and Victoria, 30 June in Queensland, SA and WA, and 1 July in Tasmania. The ACT assesses quarterly. The revenue office issues an assessment automatically; you don't lodge a return, but you must notify them when you become liable. Most states let you pay in instalments.
Do foreign owners pay extra land tax?
Yes, in most states. A foreign or absentee owner surcharge applies on top of the standard bill: NSW 5%, Victoria 4%, Queensland 3%, Tasmania 2% and the ACT 0.75%. South Australia, WA and the Northern Territory don't charge a land-tax surcharge. Holding property in a trust can also mean a lower threshold or a surcharge rate, so the ownership structure matters.
